Forecasting resource demand the right way, you can efficiently allocate and utilize their resources, optimizing operations and reducing costs.
Understanding how many resources you need to meet project requirements is essential for:
In fact, not only does forecasting resource demand contribute to project success, stakeholder satisfaction, and sustainable business operation, but it also increases employee productivity and retention.
Because when you take the time to understand your internal demand for resources, you only hire the people you need. This way, you can promise employees a predictable, defined workload that doesn’t require them to go beyond capacity now and then to meet the sudden rise in demand.
In short, understanding resource demand has lots of benefits for your organization. Not sure where to start? This guide has the full breakdown for you.
Resource demand is a measure of the resources or employees your organization needs to meet current and future workload.
This includes measuring resources you’ll need for all types of work including admin work and project work covering different types and for various stakeholders/clients.
Keep in mind: the term ‘resources’ also includes non-employee assets your organization needs including the tools you use, the office space, and more. However, these other resources are invariable, and their costs are fixed, which is why the focus is on skilled workers as resources when we talk about resource management.
Calculating resource demand is crucial for making sure you’ve the optimal human power to manage work in your business pipeline. Let’s look at these benefits of measuring resource demand next.
Resource forecasting is essential for several reasons including:
Most of all, resource planning is critical for making sure you’re utilizing all your resources optimally — never overloading them with work and never under-utilizing them (and contributing to resource wastage).
It also prevents you from hiring more people than you need. Plus, knowing each resource’s demand and promising all employees an optimal workload is a great way to keep them motivated at work.
Your business goals and work coming down the pipeline mainly determine your resource demand.
For example, let’s say you plan to onboard new clients in the coming quarter to grow revenue. This will increase the typical workload and so, before you bring on those clients, you’ll want to review your resource capacity to handle the heavy workload.
Asking the following questions will help you better understand this example: Can your current full-time employees manage the increased workload without having to work overtime? Should you hire contractors or part-time employees to manage the high workload?
Before we dive any further into forecasting resource demand, it’s important we clarify that resource capacity and resource demand are not the same.
If anything, one addresses how much work your available resources can take, whereas the other talks about how many resources you need to meet workload requirements.
Let’s take a look at the differences below:
With the basics out of the way, let’s look at how you can understand resource demand to better plan and manage projects.
Start with assessing your organization’s workload and the resources needed to take projects to the finish line.
Doing so will show you exactly what tasks go under each project and how many people including which skills are needed to complete them.
At the same time, go through employees’ workload and utilization rate. Ask yourself:
And as you review your company’s project load, look for the following answers:
Answering all these questions will show you how optimally utilized your resources are and how efficiently you’re using their current skillset. You’ll also understand which roles are in high demand.
Studying your current resource bank’s utilization rate determines how much more work you can take on without burning out available resources.
But to stay on top of the game, it’s important you regularly survey and interview stakeholders within your organization to learn about:
This information gives you valuable insight for forecasting resource demand in the near future.
Let’s say your conversations with business decision-makers tells you the company wants to expand by offering a new service. Your job then? To make sure the available resources have the right skills and capacity to manage the increased workload that comes with expansion.
Another tip to plan resource demand: use the information you gather from talking to stakeholders to plan out scenarios for planning resources.
Essentially, creating hypothetical scenarios lets you understand the impact of increased or decreased workload on the available resources. From there, you can better prepare for and plan capacity.
You can also create hypothetical scenarios for handling various other factors such as changes in industry regulations, technology changes, and market fluctuation.
Yet another way to determine your resources’ demand is by using placeholders.
Meaning: when you’re planning a project, determine the roles you’ll need to work on it. This will give you a birds-eye view of the roles and resources that are in demand as well as show you how many people you should bring, when, and for how long.
One thing to keep in mind here is that when you’re using placeholders to get a rough idea of which people you’ll add to the project team, make sure you check their availability. For this, go through your resource inventory to check if all the people are available for worth (and not going to be on vacation).
You’ll also want to look at the project budget and the resource cost. This way, you can determine if you want to reallocate any resources in case they don’t fit into the dedicated project budget.
Because demand tends to be different throughout the year, resource demand can’t remain the same all the time.
Thankfully, reviewing your project data analytics can tell you how your workload and resource demand varies seasonally. It’ll also show you other patterns and trends in resource availability and demand, helping you efficiently manage projects.
Now that you know how to determine resource demand, let’s take you through resource capacity planning tips to make sure you’re striking a balance between labor demand and staff capacity while meeting your business goals.
Keep in mind: these tips will help both project managers and the resource management team:
Hiring full-time resources isn’t always the best solution to workload management.
This is because often, the demand is temporary — thanks to seasonal fluctuation in the demand for your services.
A helpful solution to meet the short-lived demand then is to either hire a part-time role or work with contractors.
Does your resource demand grow every year at defined times? If so, work with the same contractors every year.
This reduces work on you for finding new contractors every time demand spikes. You also spend less time onboarding these contractors, saving time further.
If you see demand for a specific person is high in your organization, use the data to retain them before competitors poach them.
Some ways to do this include offering them salaries that are higher than the market standard, providing perks they value such as flexibility, and so on.
Dig deeper: The Ultimate Guide to Employee Retention Strategies.
The right resource demand planning software makes resource planning and forecasting a breeze. It’s also a huge help for strategic resource allocation.
That is: with the right resource planning tool such as Runn, you can plan projects and resources based on data rather than gut feeling.
In fact, Runn gives you a full birds-eye view of everyone’s schedule including what they’re working on so you don’t overbook employees and can easily prevent resource clashes.
At the same time, Runn makes it easy to identify which resources to assign a new project based on their experience and skill set by giving you a comprehensive employee inventory. The good news?
You can also reference this database when reallotting resources in case someone is not a good fit for a project or is scheduled for an off.
Runn also helps you set up placeholders when you’re planning projects. All you’ll have to do when planning your project is to add a name for the placeholder.
Adding these placeholders in your project plan will help you define your requirements for resources’ roles, skills, and capacity. In turn, you can use the placeholders to understand demand for a particular resource (person) or a specific role.
The best part? You can use the People Planner in Runn for getting an easy-to-understand visual overview of the in-demand roles and people.
If your planning shows your demand is too high, you can either hire a full-time employee or a part-time employee or work with contractors if the demand is only timely.
Want to better understand and plan resource demand? Take Runn for a free spin today and see how it can benefit you.
Is it possible to prioritize your team's wellbeing while also getting your projects done on time?...Yes! You just need to take workload planning seriously.
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